HOUSTON – Charges were unsealed today against five former Venezuelan government officials for their alleged participation in an international money laundering scheme involving bribes made to corruptly secure energy contracts from Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA). Two of the five defendants are also charged with conspiracy to violate the Foreign Corrupt Practices Act (FCPA).
U.S. Attorney Ryan K. Patrick of the Southern District of Texas, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and Special Agent in Charge Mark Dawson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Houston made the announcement.
Four of the defendants - Luis Carlos De Leon Perez (De Leon), 41, Nervis Gerardo Villalobos Cardenas (Villalobos), 50, Cesar David Rincon Godoy (Cesar Rincon), 50, and Rafael Ernesto Reiter Munoz (Reiter), 39, were arrested in Spain in October 2017 by Spanish authorities on arrest warrants based on a 20-count indictment returned in the Southern District of Texas on Aug. 23, 2017. Cesar Rincon was extradited from Spain on Feb. 9, 2018, and made his initial appearance today before U.S. Magistrate Judge Stephen Smith of the Southern District of Texas. De Leon, Villalobos and Reiter remain in Spanish custody pending extradition. A fifth defendant - Alejandro Isturiz Chiesa (Isturiz), 33, remains at large and a warrant remains outstanding for his arrest. All five defendants are citizens of Venezuela. De Leon is also a U.S. citizen.
De Leon, Villalobos, Reiter and Isturiz are each charged with one count of conspiracy to commit money laundering, while Cesar Rincon is charged with two counts of conspiracy to commit money laundering. De Leon, Cesar Rincon and Reiter are charged with four counts of money laundering, while Villalobos and Isturiz are charged with one and five counts of money laundering, respectively. De Leon and Villalobos are each also charged with one count of conspiracy to violate the FCPA.
“Effective deterrence of corruption requires prosecution of culpable individuals, wherever those individuals are located,” said U.S. Attorney Patrick. “We will continue to enforce the FCPA against those that avail themselves of the privileges of the American marketplace.”
“Corruption threatens economic and political stability, and victimizes ordinary law-abiding people by diverting public funds into the pockets of corrupt officials and bribe payers,” said Acting Assistant Attorney General Cronan. “The charges announced today demonstrate our commitment to fighting corruption at its source and to prosecuting those who allegedly launder their illicit gains through American financial institutions and real estate. Through cases like this, we are sending a strong message to corrupt foreign officials: if you launder your ill-gotten gains through the United States, you will be prosecuted.”
“This case is an example of what can be accomplished when international law enforcement agencies work together to thwart complex cross-border crimes” said Special Agent in Charge Dawson. “HSI is committed to upholding the rule of law and investigating those that would participate in illegal practices.”
The indictment alleges the five defendants, all of whom were then-current officials of PDVSA and its subsidiaries or former officials of other Venezuelan government agencies or instrumentalities, were known as the “management team” and wielded significant influence within PDVSA. According to the indictment, the management team conspired with each other and others to solicit several PDVSA vendors, including vendors who were residents of the United States and who owned and controlled businesses incorporated and based in the United States, for bribes and kickbacks in exchange for providing assistance to those vendors in connection with their PDVSA business. The indictment further alleges the co-conspirators then laundered the proceeds of the bribery scheme through a series of complex international financial transactions including to, from or through bank accounts in the United States. In some instances, they allegedly laundered the bribe proceeds in the form of real estate transactions and other investments in the United States.
According to the indictment, two PDVSA vendors - Roberto Enrique Rincon Fernandez (Roberto Rincon), 57, of The Woodlands, and Abraham Jose Shiera Bastidas (Shiera), 54, of Coral Gables, Florida - sent more than $27 million in bribe payments to an account in Switzerland for which De Leon was a beneficial owner and De Leon and Villalobos were authorized signers. The indictment alleges those funds were later transferred to other accounts in Switzerland. Both Roberto Rincon and Shiera previously pleaded guilty to FCPA charges in connection with a scheme to bribe PDVSA officials. According to admissions made in connection with their pleas, Roberto Rincon and Shiera paid bribes and provided other things of value to PDVSA officials to ensure that their companies were placed on PDVSA bidding panels and ensure that they were given payment priority so that they would get paid ahead of other PDVSA vendors with outstanding invoices. Roberto Rincon and Shiera are currently awaiting sentencing.
With the unsealing of the indictment today, the Justice Department has announced charges against 15 individuals, 10 of whom have pleaded guilty, as part of a larger and ongoing investigation by the U.S. government into bribery at PDVSA.
HSI in Houston is conducting the ongoing investigation with assistance from HSI in Boston and Madrid as well as from IRS Criminal Investigation. Deputy Chief John Pearson and Assistant U.S. Attorney (AUSA) Robert S. Johnson are prosecuting the case along with Trial Attorneys Jeremy R. Sanders and Sarah E. Edwards of the Criminal Division’s Fraud Section. AUSA Kristine Rollinson is handling the forfeiture aspects of the case.
The Criminal Division’s Office of International Affairs, the Swiss Federal Office of Justice and the Spanish Guardia Civil also provided assistance.
USA v Nervis Villalobos Et Al - Sealed PDVSA Indictment - 23 August 2017 by Latin American Herald Tribune on Scribd